The USDCAD exchange rate is moving towards 1.3600 while Canada’s Retail Sales, excluding automobiles, experience a significant decrease.

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• USD/CAD marches towards 1.3600 as Canada’s Retail Sales excluding automobiles contract sharply.

The pair currently trades last at 1.35918.

The previous day high was 1.3565 while the previous day low was 1.3513. The daily 38.2% Fib levels comes at 1.3545, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3533, expected to provide support.

The USD/CAD pair is marching sharply towards the round-level resistance of 1.3600 as Statistics Canada reported mixed Retail Sales data for June. Consumer spending for goods and services other than automobiles contracted at a higher pace of 0.8% vs. 0.3% pace of contraction recorded for May while investors projected an expansion by 0.3%.

Overall Retail Sales expanded by 0.1%, in line with May’s reading while market participants anticipated a stagnant performance. A vulnerable consumer spending would allow the Bank of Canada (BoC) to keep interest rates steady ahead.

S&P500 futures generate decent gains in Europe, portraying a recovery in the risk appetite of the market participants. US equities witnessed selling pressure on Tuesday as investors remained cautious about the Jackson Hole Symposium.

Investors are expecting that Federal Reserve (Fed) chair Jerome Powell will explain the benefits of keeping interest rates higher for a longer period. In July’s monetary policy meeting, Jerome Powell announced that further policy tightening would be data-dependent.

Richmond Fed Bank President Thomas Barkin said if inflation remains high and signs of a drop in demand remain absent. The situation will force the need for tighter monetary policy.

The US Dollar Index (DXY) resumes its upside journey after delivering a breakout of the consolidation formed in a range of 103.00-103.67. The USD Index picks strength as developing economies have been exposed to recession due to a bleak economic outlook and higher interest rates. Contrary, the 10-year US Treasury Yields dropped below 4.3% as more interest rate hikes from the Fed are less likely.

In the early New York session, investors will focus on the United States preliminary PMI data for August to be reported by S&P Global. For August, the S&P Global Manufacturing PMI Index is likely to improve further to 49.3. The Services PMI, however, is expected to drop to 52.2 in the reported month, compared with July’s 52.3 print. The Composite PMI is seen unchanged at 52.0 in August.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3581 at the time of writing. Pair opened at 1.355 and is trading with a change of 0.23 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.3401, 50 SMA 1.329, 100 SMA @ 1.3387 and 200 SMA @ 1.3456.

The previous day high was 1.3565 while the previous day low was 1.3513. The daily 38.2% Fib levels comes at 1.3545, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3533, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.352, 1.3491, 1.3468
• Pivot resistance is noted at 1.3573, 1.3595, 1.3625

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